1. Field of the Invention
The present invention generally relates to electronic commerce systems and, more specifically, to a procurement system and method for trading partners which enables a plurality of users within a purchasing organization to procure goods/services from pre-arranged suppliers, consistent with the level of authorization given to each user and enables automated payments to the supplier by a bank after the goods/services have been delivered.
2. Description of the Prior Art
In any business, and particularly within large organizations having hundreds or even thousands of employees, the procurement of "non-production" or "non-custom" products and services in high volume is generally a time consuming process and a costly one. In various industry surveys, companies cite the costs of processing a requisition and a purchase order as anywhere between $25 and $300; a cost that often exceeds the value of the goods being ordered.
Ordering of non-production goods in high volumes, such as office supplies and desktop hardware, can be a time-consuming and expensive process for suppliers as well. For example, suppliers have to be increasingly competitive in today's market as their customers are constantly seeking immediate turn-around on orders and better overall customer service. However, suppliers find that the process of phone or paper purchase orders is costly because of the administration associated with order processing, can cause delays in order fulfillment, and is prone to errors. Additionally, paper-based marketing in the form of catalogs and price lists is expensive and makes it difficult to keep customers up-to-date with the latest product availability and pricing.
Ultimately, all these factors impact buyers through higher prices or poor service. Buyers have to implement time-consuming processes to prevent purchases that exceed employee limits. As a result, the cost of processing requisitions and purchase orders often exceeds the value of the goods being purchased. Buying organizations also find it difficult to prevent employees from purchasing from non-preferred suppliers and thus do not get the advantage of negotiated prices. This adds to buyers' costs and reduces business for their preferred suppliers.
There is, therefore, an extremely large overhead factor associated with the procurement of products and services which, in a large organization, can cost the company thousands or even millions of dollars a year.
There is a need, therefore, for a simple automated procurement system that will reduce the amount of paper needed to be handled and enable the employees within an organization to acquire the goods and services that they require, consistent with their needs to perform their tasks. An automated system must be secure so that it is not abused by employees within the organization or parties outside of the organization.
There have been a number of obstacles in establishing an effective commerce system. Systems disclosed in previously issued patents have sought to address some of these obstacles. One problem is the "user-friendliness" of the systems, or the ease of use of the systems so that each person that needs to requisition a product or service can do so in an easy and efficient way. Another problem has been to develop a system that can be used with existing computer systems. This is an important consideration since many businesses have already made substantial investments in "legacy" systems, including main frames, mini computers, and micro computers. These systems frequently use different operating systems and different data formats. Another problem has been to develop user interface that is secure from abuse from within and from outside the buyer organization.
One example of an on-line system for processing business transactions is disclosed in U.S. Pat. No. 4,799,156 for an Interactive Market Management System. The system discloses a plurality of buyers and a plurality of sellers which can be linked to each other by means of an interactive market management system (IMMS) for interactive communications. Each of the participating entities which is a subscriber to the system must always operate through the IMMS, which serves as a focal point or hub through which all transactions must be funneled. The patent does not address the need or ability of individuals within an organization to be provided with different levels of authorization so that different users within the same organization or "buyer" can access different types and/or spend different amounts on goods and/or services.
In U.S. Pat. No. 5,557,518, a system is described for trusted agents for open electronic commerce. However, this patent involves the use of "money modules" to create a secure transaction environment for both the buyer and the seller of electronic merchandise and services. The primary objective of the patent is to provide a system which allows customers to buy electronic merchandise or services on demand without enrolling in an electronic community. According to this patent, a customer and supplier, trusted agent, establish a secure session. The customer trusted agent communicates with a first money-module and the supplier trusted agent communicates with the second money-module. The supplier trusted agent delivers the electronic merchandise. The first money module transmits electronic money to the second money module. Upon successful completion of the money payment, the first money module informs the customer trusted agent, and the second money module informs the supplier trusted agent. The supplier then logs the sale and the customer may use the purchased electronic merchandise. The patent appears to be restricted to the sale of electronic merchandise.
In U.S. Pat. No. 5,319,542, a system for ordering items using an electronic catalog is disclosed. However, the disclosure is primarily concerned with establishing a private catalog resident on a customer's computer system. The customer can electronically requisition a product based on the information provided in the catalog and route or requisition through the appropriate approval process within the enterprise. However, requisitions must then be processed through the customer's procurement system and transmitted electronically as purchased orders to the supplier. Therefore, aside from establishing private catalogs which may be used by the customer, the system disclosed in the patent does not eliminate many of the inefficiencies and expenses involved with requisitioning products and/or services by many employees in a large organization.
In U.S. Pat. No. 5,592,378, a computerized order entry system and method is disclosed which includes a plurality of servers, data entry devices, back-end systems and data bases. The computer order entry system is intended to permit placement of orders by capturing order information and storing the order information through the data capture mechanism. This is accomplished by a sequence of steps of multiple search categories. The patent does not address the ready accessibility and ease of use by many employees within an organization to requisition goods/services from a pre-arranged trading partner or multiple partners.